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State Budget of MP 2016-17: Is it a mathematical exercise only?

Submitted by admin on Wed, 03/15/2017 - 10:48

Madhya Pradesh Government presented a budget of Rs. 158713.04 crore[1] with a revenue surplus of Rs. 3509.81 crore (cr.). The fiscal deficit is estimated at Rs. 24913 cr. which is 3.49% of the Gross State Domestic Product (GSDP). In the previous year the deficit was pegged at 2.99% maintaining the Fiscal Responsibility and Budget Management (FRBM) guidelines.

The positive highlight of the budget is the renewed focus on irrigation to enhance cultivable area through revival of many old schemes and starting of 18 medium size irrigation schemes. The organic farming promotion has been underscored by announcing ‘ Paramparagat Krishi Vikas Yojana’[2]. There is a consistent thrust on agriculture growth over the years, which is recognized by the Government of India, awarding MP for outstanding performance in agriculture. The budget also announced that online shopping would be taxed with 6% entry tax to provide level playing for the local retailers.

In spite of a few positive initiatives, there is nothing remarkable or different in the present budget to influence many Sustainable Development Goals (SDGs), recently committed by the Government of India in the UN Summit. Madhya Pradesh is still challenged with many social development issues- high incidences of poverty and malnutrition, low literacy and quality of education, relatively high IMR and MMR, declining sex ratio and gender disparity etc.

The budget exercise remains mere cosmetic in nature as later in the year significant reduction and adjustments are done, cutting budget from social sector programmes. In FY 15-16 in many social sectors programmes, substantial reduction in allocations[3]was observed in revised estimates.

Estimated budget for building model schools was kept at Rs. 200 cr. for which later zero allocation was proposed. The budget for the national middle school education campaign[4] was reduced by 68%.

§ The central Government decided to transfer a Panchayat empowerment scheme[5] to the state Government with a rationale of higher allocation for the state budget from the central pool. In the budget Rs.162.57 cr was planned and in the revised estimates, zero budget was allocated.

§ Many programmes/ budget lines related to tribal/SC/ST and OBC education promotion including hostel construction and renovation got reduced budget limited in the range of 50% to 25%. from the initial planned budget to the revised budget in FY 2015-16.

§ The ICDS budget got reduced from Rs.975.51 cr. to Rs. 764.47 cr. with a reduction of 21.63%.

§ Budget for Rajiv Awas Yojana, (housing for the poor) was reduced by 75% from the initial planned budget.

§ The budget line of Mid Day Meal (MDM) programme got reduced by 31.76% and budget line related to transportation of MDM got reduced to 43%.

§ Social Security and Welfare budget got reduced by 60% which affected disbursement of old age, disability and widow pensions to the poor citizens.

These are few examples which demonstrate that the current allocations have limited meaning as there is no adherence to the budget commitments either due to weak political will to fulfill socially desirable goals or there is uncertainty in receiving allocated funds from the central government. Further when actual expenditures for the same year are available one will see even lower spends as is evident from actual expenditures of earlier years. It was expected that additional resources allocated to the state of MP from the center-state distribution of funds would be more rationally applied. This was an opportunity for the state to allocate more resources in social sector programmes to demonstrate political will for addressing state specific development challenges but it was not used.

In recently enhanced state share in 2015-16 from the central pool, (42% share in central taxes and 20% as grants), state received Rs. 20800 cr grants and Rs. 30800 cr as state share in taxes in FY2015-16 so far. One of the installments of Rs. 2800 cr is yet to be received which may arrive towards the end of March, further affecting budgeted expenditure. It was Rs. 17591 cr as central grants and Rs. 24106 cr as tax share in FY 2014-15.

The National Family Health Survey IV reveals that the IMR in MP has come down from 62 to 51, however, there is no substantial improvement in the quality of services for the institutional deliveries which are around 86% currently. About 54% posts of the gynecologists are vacant in public health care system. There are only 789 beds available in 1157 PHCs in the state[1]. This year, the budget has proposed on one hand for opening new 2000 sub-PHC and on the other hand the emphasis is on improving the tertiary health care allocating Rs. 903 cr for it. The Government is not realizing the need to improve the quality of services of the existing PHCs by ensuring regular presence of doctors, availability of medicines and better child delivery rooms and operation theaters. With improved roads, people are looking for more reliable PHC even a few kilometers away, than non-performing Sub PHCs in the vicinity of their villages where there are no doctors, insufficient medicines and beds. New sub-PHC means – more construction of buildings only.

There are total 122025 teachers in 122102 schools, from primary to higher secondary schools, in MP i.e. almost one teacher per school. It reflects great deficiency of teaching staff affecting the quality of education as well as retention of in public education system. The teachers hired on contractual services have been protesting and campaigning for regularization of their services this year. The honorarium for the contractual teachers is provisioned for Rs. 517 cr. which reflects that there is a need for substantial increase in the education budget to keep regular teachers in schools to improve quality of education. Currently, only 63.9% children are literate in rural areas. The quality of education of the primary school children in MP is rated significantly low in the Annual Status of Education Report survey.

Provision for MGNREGS in state budget is of Rs. 4005 cr. for FY 2016-17. The labour budget calculated for MGNREGS works is more than 4600 cr for the FY 2015-16. The budgetary provision of Rs. 4005 cr is far lower than just the labour budget of the current financial year. The expenditure of MGNREGS till February 24, 2016 was Rs. 2870.52 cr. In light of the current expenditure level in MGNREGS, the proposed budget appears high, however, there is no farsightedness and aspiration to enhance investment in MGNREGS to combat drought and distress migration which will get more severe in summer in many parts of MP, particularly Bundelkhand.

In FY 2014-15, central Government provided central share of Rs. 2451.63cr which was reduced to Rs. 2244.75cr in FY2015-16 as on 24 February, 2016. The current status of MGNREGS revealed that out of Rs. 400 cr due payments, Rs. 285.64 crs needed to be paid as wages to the MGNREGS workers. Current balance available in the treasury is only Rs. 32 crs. If the pending installment is delayed from the central Government, there will be further delay in payment of wages for the poor workers who need timely payment for their daily survival. Bundelkhand region of MP is reeling under drought, which will worsen in coming months.

The state’s flagship scheme Ladli Laxmi, associated with the Shree Shiv Raj Chauuhan, CM, got a high allocation of Rs. 903 cr. compared to Rs. 6 cr. allocated for the Beti Bachao Abhiyan. State resources are spent in schemes that popularize the CM rather than spending in those schemes or development areas that demand more resource allocation. There is a substantial reduction in social sector programme allocations in the current budget and its impact is visible on the ground. A large number of social security pensioners have not got their pensions over the last many months.

Civil society members of the Peoples Budget Initiative, a national level network, organized consultative meetings in MP with local budget groups to provide suggestions to the MP Government at the time of budget preparation. It is argued by the member CSOs that public resources should be spent in larger good by incorporation of aspirations of various sections of the society. The marginalized and the poor sections do not have enough voice and representation in policy discourse. The Government has responsibility to ensure social justice as much as economic growth. The budget groups in MP will regularly watch the social sector spending and monitor the impact of budget reduction at the district level and below. The taxpayers’ money should be judiciously spent applying the principles of equity and social justice. The network members will track the expenditure pattern of social sector programme of their interest and engage with the elected representatives of the Assembly to ask questions in the house. A stakeholder consultation meeting will be planned to monitor the revised estimated of social sector budgets in the third quarter of the financial year.

I would like to thank Ravi Duggal for his valuable inputs and guidance in finalizing this article.